Some regional businesses could be keeping more of their hard-earned money under a proposal put to the government by the South Australian Business Chamber. In its annual pre-budget submission, the Chamber has asked for a 50% discount on payroll tax bills for eligible businesses located in the regions.
The proposal, which is one of 12 recommendations the Chamber made to the government ahead of the state budget, pitches a discounted rate that is competitive with Victoria’s payroll tax percentage of just 1.2125%.
“We want an environment that encourages businesses to set up, grow and stay in the regions rather than be lured across the border to avoid a comparatively exorbitant tax” the submission reads.
“To generate increased business investment, we call for a 50% payroll tax reduction for regional South Australia”.
To be eligible for the rate, the proposal suggests adopting Victoria and Queensland’s regional payroll tax schemes where the principal address of the business is located in a regional area, and at least 85% of its staff live and work in that area.
Andrew Kay, Chief Executive Officer of the South Australian Business Chamber says, “We feel this is a reasonable criterion that can be replicated for regional South Australia and would be happy to work with the government to find a suitable approach.”
The proposal boasts six suggested reforms of payroll tax, highlighting the unpopular levy is a tax on jobs and a disincentive to grow.
“Our surveys repeatedly demonstrate it is the most constraining state-based tax”, Mr Kay added.
“High wage growth in recent years has created a bracket creep scenario that has seen many businesses either paying this tax for the first time, or sitting on the cusp, such that it is impacting their decision to grow and create more jobs.”
“The abolition of payroll tax by any government is highly unlikely, however, we believe there are opportunities for reform that will not only make South Australia more economically competitive but support our state as we take on the ambitious defence, energy and infrastructure projects that lay ahead, he said.
The South Australian Business Chamber would also like to see the threshold at which businesses must pay the levy increased from $1.5m to $2.1m and a waiver for wages paid to apprentices, trainees and new graduates.
A full list of recommendations for payroll tax reform as proposed to the state government can be found at sabusinesschamber.com.au/payroll-tax-reform
